President Likely Has Authority To Appoint Acting Director To Replace Cordray At CFPB

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray's announced yesterday (as covered here) that he will be resigning from his position by the end of this month.

The Administration appears poised to announce Office of Management and Budget Director Mick Mulvaney as an interim replacement until a permanent director can be selected by the President and approved by the Senate.

From a legal perspective, when it comes to determining the interim CFPB director, the succession issue is a simple one.

Some commentators have asserted that the Acting Deputy Director of the CFPB must succeed Cordray as Acting Director, until a permanent Director is confirmed; however, an analysis of the applicable statutes suggests the President does have the authority to select the Acting Director.

Statutory Framework for Interim Succession at the CFPB

There are two statutes under which an interim director potentially could be appointed.

The first is the Dodd-Frank Act, which created the CFPB, and which provides that the deputy director "shall...serve as acting Director in the absence or unavailability of the Director." 12 U.S.C. § 5491(b)(5).

The second statute is the Federal Vacancies Reform Act of 1998 ("FVRA"), 5 U.S.C. § 3341 et seq., which applies when "an officer of an Executive agency...whose appointment to office is required to be made by the President, by and with the advice and consent of the Senate, dies, resigns, or is otherwise unable to perform the functions and duties of the office." 5 U.S.C. § 3345(a).

Under the FVRA, an acting director may perform the duties of the vacated office for 210 days, without approval by the Senate. 5 U.S.C. §§ 3345-46. (The Supreme Court has recently ruled that the interim director cannot be the same person as the nominee for the permanent position. See Natl. Labor Relat. Bd. v. SW Gen., Inc., 137 S. Ct. 929 (March 21, 2017).)

By default, under the FVRA, the "first assistant" to the resigning officer performs the duties of the office on an acting basis. So, by default, the deputy director would step into Cordray's shoes. But, the FVRA also provides that the president may bypass the "first assistant" and choose to appoint a senior employee or officer of the CFPB, or an officer at any agency who has already been approved by the Senate, as acting director. 5 U.S.C. § 3345(a)(2)-(3).

Some Analysts Have Suggested Dodd-Frank Requires that the Acting Deputy Director Replace Cordray

So far, there have been few analyses of how these statutes would apply to determining an interim replacement for Cordray. Some of those who have analyzed how these statutes interact have concluded that the Dodd-Frank provision likely controls. See articles here and here. These commentators make two primary arguments:

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